are running out of time. here is a headline in the "washington times" -- on twitter -- guest: in terms of the question , it probably is probably why coal miners are losing their jobs. the coal industry needs to be more heavily regulated. but i would say the exxon spill is just terrible and we have fairly lax regulations on pipelines and we need to

improve those up. a lot of the pie plums were built nine or so. host: contributing editor of pacific standard and author of the book "oil on the brain -- petroleum long, strange trip to your tank." we appreciate your time. thank you. host: we will be back tomorrow 7:00 a.m. eastern time. enjoy the rest of your day. [captioning performed by national captioning institute] http://twitter.com/cspanw [captions copyright national cable satellite corp. 2013] >> defense secretary chuck hagel speaks today at the national defense university at fort

mcnair here in washington d.c. he plans to discuss this dj and fiscal challenges. we will have live coverage of his remarks starting at 12:30 p.m. eastern. president obama heads to colorado today. he will talk about the state's newly passed gun control laws. he will be at the denver police academy to for universal background checks as well as for congress to at least vote on assault weapons ban and limit some large capacity magazines. it begins at 5:00 p.m. eastern and we will have live coverage here on c-span. tonight, a look at protest troops in america. we recently talked with the code pink cofounder on how protest movements fit into the political discussion. we want to get your reaction to the conversation with your phone call, tweets, and facebook comments. a brief look at what you will see. >> i am very pleased to be joined by my wife kathy and my brother tom. >> i speak for the mothers -- pakistan and somalia.

>> please remove that woman. >> the obama administration refused to tell congress what countries we are killing children in. --ator feinstein >> if you could please expedite the removal. >> nothing more important than the children of pakistan. do your jobs. world peace. it depends on it. we are making more enemies. >> please proceed. , i am going to halt the hearing. i will ask of the realm be and the code pink associates not be permitted to come back in. they have done this five times now. five times are enough.

emma and you can see the entire conversation with the code think cofounder tonight getting underway at 8:00 eastern get a conversation about tonight has already begun on facebook did let us know what you think on .acebook.com/c-span and join us tonight for a live discussion about the impact of protest movements. out there in a way, i indicated before, respectable women did not do. but this is a new era. this is the time when the women's movement is underway, and interestingly enough, ofeone like j tyler sort fix into a certain extent. she is very conservative in some ways, but in terms of breaking through the traditional way that a woman should behave him and she's doing it in a way that other women are not at that time. >> our conversation with historians on j tyler, second wife of resident john tyler, is

now on our website www.c- span.org/first ladies. now former treasury secretary henry paulson. he spoke yesterday at george washington university about china's economic, environmental, and political challenges. for jen magazine managing moderatedy serwer this discussion --"fortune" magazine managing editor andy serwer. >> it is a pleasure to welcome you to george washington university where we are honored to host a conversation, a preview event for the 2013 "fortune "global forum which this year will be held in chengdu china. it brings together chief executives of global thought leaders to discuss national commerce and other issues. this year i am delighted to announce at george washington university will become the first and so far the only educational partner for the "fortune"

global for him it will provide and facultyudents and alumni to very important content that is developed there, but also "fortune" will have access to our faculty expertise. it is now a pleasure to introduce today's speakers for this preview event. henry, better known as hank paulson, was sworn in as 74 the secretary the united states department of treasury and light tent, two six. as the secretary, the president 's leading policy advisor on a broad range of domestic and international economic issues. in 2011 he founded the paulson institute, a nonpartisan center at the university of chicago, to remotely sustainable economic growth and a cleaner environment. the four he entered public service, secretary paulson held several leadership positions at goldman sachs, including that of chief executive officer. secretary paulson has long

advocated the building of a stronger relationship between the united egg and china. while at goldman sachs he established the firm's china presence and encourage elaboration between the two largest economies has been a core purpose of the institute. he has written numerous articles -china relations, on the nation conservatives series asia-pacific council and research on chinese investment in the united states. was named managing editor of fortune in october 2 thousand six if this possibility include overseeing "fortune" magazine and fortune.com with a combined readership of 11 million readers and the digital media and the conferences. under his tenure, "fortune" was ge hot list in 2012. in 2010 it won the society of

business editors and writers award for best in business general excellence. that year the magazine also received a new york press award for the 2009 reporting on bernie made off. " in 1985 asortune an intern and served as reporter and editor on stories about wall street, investing, information technology, and entertainment. he is a regular guest on msnbc's 's squawkoe and cnbc box. from 2001-2006 he was business editor for cnn's american morning. join me in welcoming secretary hank paulson and mr. andy serwer. >> thank you. thank you very much, president knapp and to everyone here at

george washington university. thank you to all the students and everyone else who has come here today. we are delighted to see you all. and also thank you, secretary paulson, for coming. and having this conversation with us. let's get right to it. the conversation today, of course, is about china and the united states relationship with china. ,s president knapp suggested hank is uniquely qualified to discuss this given his role in government at goldman sachs and the nonprofit world. each one of those roles is salient in a unique way to what is going on in china and the relationship, the u.s.-china relationship. i think you will see that. let's get right to may be the most important topic with regard to china right now. mr. secretary, the changeover in leadership. the goodu have said

news is that president xi jinping is a strong leader. the bad news is that he has to be one. can explainyou exactly what you mean by that. >> yes. and let me also say, it is good to be back in washington. if only for a day. particularly good to be here with all of you. .ndy, you stole my line he is a strong leader, and they have a strong leadership team. we can talk a little bit about that. but i think they've got some real challenges. this leadership team is going to be tested by challenges domestically and internationally over the next 10 years. , theing that economy scale they have to manage it given the pace of change is just

unprecedented. their current economic model, i think, is running out of steam. i think they need to reinvent that. he has some other major challenges. he really needs to make some big changes in governance. institute the rule of law, which is very necessary for continued business, economic, and political success. is a big area of concern and protests. to address the dirty air and the dirty water. correction, again, which is infuriating a lot of chinese, particularly over issues like property rights and so on, it is a big challenge.

this leader i think it's particularly strong. the standing committee, which of the senior leadership group of the party, the standing committee of the politburo is now seven rather than five. it will be much easier to reach consensus. xi jinping, the president, and and the john -- premier are two members who are not term limited so they will be there presumably for 10 years. the other five are really good getting things done. and expectations are very high in the country. you would have to look back and just remember how high expectations here after president obama was elected. they are high because there is a general perception which i agree which stalled for

at least five years. there's a lot to be done. they are high because his leadership style is very appealing, very different. he speaks extemporaneously. he has said when people meet with him some of bureaucrats aren't to come in and just read talking points. that he has really spoken out against some of the abuses of power and some of the perks. away with soo many of the motorcade that disrupt traffic. you are not to have sumptuous entertaining. when i had lunch at the embassy here a couple of months ago to say goodbye to the ambassador, i came away a little bit hungry. instead of the standard 8, 9 courses, it was four courses

and a soup. he said there would be no more hard liquor served when the military entertains. liquor company stock to drop to 10% the next day. there's not as many people in the vip waiting rooms and the casinos at macau. so, he's done some things symbolically. he understands the role the private sector has got to play. i think expectations are high. a lot that needs to be done. it's really a difficult ,hallenge running an economy where you just take a look at what happened. never in the history of the world has there been a country of that size that has had so much change so quickly. and the expectations of the chinese people are continuing to grow. so, to continue to manage the change, and to put into place reforms on the scale in which he is going to have to do it,

and the place of a vested interest -- and people are going to be fighting for the status quote -- his leadership team has his work cut out. >> you touched on a number of challenges in terms of the economy switching him a production economy to a consumption economy, the environmental factors, the political factors these are the theis a vis some of neighbors. but i want to talk about corruption. when i talk to some people in china, they seem to indicate it could be problem number one. the feeling among many people in china, perhaps, is to get ahead in china you don't play by the rules. the feeling that that is something that has changed and is different from what it was 10 years ago, and that this is something that president xi needs to address and is very keen on addressing, do you think that is correct? >> let's step back and little bit and talk about rules.

the reason i started off when i talk about the challenge, i talked about instituting the rule of law. you look at the history of china's economic reform, they moved very, very quickly. ,nd so, to move that quickly they use pilot programs. and encouraged innovation various activities, which were really at head the rules they had in place. it is been a country -- a country ruled by men as opposed to law. that is probably an oversimplification. but i think the reason that i and so many others went as frequently as we did to china was relationships were very, very important. andcountry is now at a size a scale where, for them to be

successful, they are going to need to engage in institution to be able to implement, not only to have laws in beijing and roles but to be able to implement and enforce the rules across a wide range of areas. from the environment to securities laws, and so one. .- and so on a lot has to do with not just rules and institutions but it has to do with good governance and transparency. i really believe that the only way for this to work is both the leaders and citizens have got to be invested in the rules- based system. .o, now you come to corruption

this is a serious problem and it is infuriating people. i would say the biggest source -- there are a number -- but one of the biggest sources has to do with property rights. nina civil officials -- municipal officials taking and selling land, which is one of the big financing vehicles for urbanization. but going after that corruption, the head of the disciplinary committee and a member of the is the manmmittee we know well here. he was my counterpart at the sed and has been one of the top economic reformers in china. he knows how to get things done. the strategic -- >> excuse me, strategic economic dialogue.

it is not an easy challenge because you have to go after it. looking at it systemically. and then they will need and already have had some very well- publicized examples in terms of government officials, good business people. this is a significant problem, is as xi has said, it significant problem and they are taking it on. not just in china. in much of the developing world, this is a significant problem. >> perhaps get magnified by the rate of growth. >> because china is so large. don't think there is more corruption in china than there is in india, for instance. or many other places in the world.

but because china is such a big ,ngine in the world economy and there's so much change there, that it is a huge issue. >> i do have questions from all of you, or some of you, that you submitted, and we will get to those. a lot of things we want to touch on first. sustainability, i mentioned, is something you are very keen on. something that is really the focus of the pulse initiative and the polson institute. having a sustainable economic , awth plan, a model, perhaps rising china on how to implement sustained economic growth. we hear about the environmental problems in china, mr. secretary. i am frankly a little bit surprised they haven't been addressed liquor.

and i think i share that feeling with maybe some others. in fact, the problems it seemed to be getting worse over the past couple of years, accelerating over the past couple of months. of course, the pollution in beijing, the dead pigs in the river in shanghai. and i have seen stories in the paper this week about these problems. tot will it take for china really begin to address it? it seems at some point, the cost of not doing anything will exceed the cost of sitting still -- or changing it, i should say. >> andy, as you said, the paulson institute is a think and do tank, not-for-profit. it is focused on u.s.-china because we are the biggest economies in the world, biggest consumers of energy, biggest emitters of carbon. -- a lot offocused

our focus is on having economic growth and having it be sustainable. everything from investment in the u.s., encouraging chinese investment in the u.s. that leads to more jobs in the u.s., to leadership practices, best practices in business for the leaders of the state owned enterprises and other big companies in china that are seeking to become leading global companies. is then a big part of it focused around sustainable urbanization. , in my that will be judgment, the biggest economic event of the first part of this century, with another 300 million chinese to go to the cities. that is going to be a driver of economic and environmental outcomes. you are right, we need a new model of growth.

but let's get to your question specifically about the environment. because as i explain it to have donee chinese some extraordinary things in terms of the amount of an investment they have made in alternative sources of energy in the clean technology. .he largest user of wind userare going to be a huge of the solar. they've got a big percentage of manufacturing capacity of solar. they've shut down many more dirty power plants than we have. they have been winning some battles but may be losing the overall war because of the good --ngs they've done has because the good things they've

done have been overwhelmed by the pace of growth. they now recognize it. the public is demanding it. -- also growth sustainability, i think, too many people i think has just been a buzzword. i think people are beginning to really understand the growth model is not sustainable. what is another point of gdp worth when people are dying of dirty water, dirty air? there are all kinds of estimates about what the drag is on economic growth of the dirty environment. some people to leave several percentage points. but it is clearly not sustainable. and i think all of us in the need to really rethink some things. andknow, economic growth environmental protection are not at odds, not -- opposite sides

of the same coin when you look at it on a longer-term view and you are looking at longer-term prosperity. and i think the chinese and all of us need a new economic framework that basically says that we need a model of economic growth that lets us increase our whilerd of living recognizing the scarcity of resources, natural resources, and not undermining the ecosystem and environment we need for water, food, the air we breathe, for energy. i think we are close to the tipping point globally in these issues. and of course, the chinese are focused on this big time. and they need a new model of urbanization. will achieve they

one. that is why i am spending the amount of time i am spending there. >> do you get the feeling i'm a though, the alarm bell has gone off recently? first of all, they have been focused on this for some time, they understand it. but what you see, the dirty has gotten a lot of attention. of course, the air in beijing is dirty. largely because of there is a and you've got these migrant workers who don't have the same economic benefit that others have in china -- something in the neighborhood of 300 million migrants from the farms that come to the cities and they don't have the same economic benefits, they don't have the same education benefit, and to keep themselves warm they --e been burning dirty coal

well, coal, which is the cheapest coal they can find, to stay warm. -- iyou look more broadly spent a lot of time with people who are my contemporaries, and some of whom discount climate change. at 50ou are looking degrees below in russia, snowing in istanbul, burning tires to stay warm in kuala lumpur, the: in beijing,he coal i think there is a serious global problem and i don't think we can solve this from the u.s. alone. the only way to solve it is to develop nuclear technologies that can be rolled out on a cost efficient basis in scale in the

developing world, particularly china. >> migrant workers -- not just cars on the coal-fired power plants? >> i just say this -- because i will get to this--when you say what are the things that china needs to do in terms of economic model for reform, you start off by saying -- which is true -- they need to move toward more and biggestth services sector and less reliance on exports and heavy government investment in infrastructure and resource -- exports. but they also need to normalize the labor market, which is a tricky thing to do. and if theydo it, take the restrictions off of the migrant workers as they go to the city -- and if it is done aoperly -- there will be

construction dividend. that is probably the second thing i say they need to do. the third thing i would point out, which we talked about, is to deal with these environmental issues that are so tough. they also need to continue the reform of the state owned enterprises. they need to reform the financial markets, which we've talked about, and also this urbanization -- they need a new model for urbanization. where they are going to be able to continue this process on the magnitude and scale which is unprecedented and do it where they minimize some of the social, environmental, and economic stresses. a big part of it will be municipal finance. because right now they are overly reliant on land sales. taking the farmer's land, means oft, and ok

finance. so you need to come up with a system where mayors and governors, whether on budget that is transparent and they've got authority. so, they've got a lot to do. >> let's switch over to another difficult subject, quite frankly, which is hacking. when it comesct -o u.s. -- chinese -- u.s. chinese relations. a couple of questions. is the chinese government behind hacking institutions in the united states, companies and governments? if so, how bad is it? and if so, how should the u.s. respond? , let me start with a little background. all, i think all governments engage in intelligence gathering vis a vis other governments. so the big point of friction and

tension comes when a government or a company gathers intelligence through hacking, gathers intelligence in the trade secrets, from u.s. companies. that is the point of friction. , i started off by saying i think it is really important for all companies to do everything they can to protect themselves against cyber theft of all kinds. and it is also the responsibility of the government to help ensure that this economic -- in short economic security. so now, let's move to china.

this is a major area of tension with china, and rightfully so. somesperately need international, some global of enforcingways this. we need to find common ground with china on these things. because it is in everyone's thatest to make sure economic security is maintained. at it, -- now, as i look at it, the chinese has the same interest as we do and every other nation in preserving our global economic system and not because welapse can't agree on rules to enforce

economic stability. is something that is a really important area. , what do you think -- just to follow up on that -- do you think the obama administration -- the obama administration has been slow to criticize china or call china on this. but recently they did. do you think that is an appropriate response? >> i think the obama administration has clearly got a responsibility to help our companies protect their intellectual property and their trade secrets. and i think as we look at what we need in this country, we need, i think, stronger laws. we need to be able to enforce

the laws. need to do aesses much better job of hardening their computer systems. .o they are not as vulnerable and they need to do a better job of reporting and attack immediately. we we need the laws and need to enforce those laws. >> in your book "on the brink those quote and i should let everyone know you are working on a new book about china which will be out in a year or so, early next year. , everyonentime should have read, and hope, your first book -- i believe your first book, am i right? "on the brink." it is about the financial crisis. one thing i pulled out that was interesting was in september of ,008, things were bad

obviously deteriorating very fast in the united states. you notified then the vice premier to give him an update on what was going on here. you kind of warned him and he said, maybe things are ok, and you -- he said, actually, hank, maybe things could get worse. i thought was a fascinating interchange. how and how closely do the chinese monitor the u.s. economy? , of course they monitor it carefully. --y were highly relying in and they are highly reliant on exports. i think the financial crisis was the first wake-up call they had. i think the second one was the european crisis. and i think now they just really understand -- what is their economy?

eight dollars trillion now? -- $8 trillion now. europe, the u.s., and japan is -- they can insulate themselves from what is happening in the broader world when they are as reliant as they are on exports. another reason why they are working so hard to do more to mastech wide growth. -wide growth. the chinese were very aware of what was going on. ofy are big investors treasury securities. they are the largest holder of our treasuries. the largest foreign holders of fannie mae and freddie mac securities. so, they had a big interest. frankly, i think the relationships we maintain and the level of trust we built up through the strategic economic dialogue, it led to a very

constructive relationship. and they behaved in a very responsible way throughout the crisis. and we communicated frequently. even to the point that when george bush made a very important decision, which was he called the global leaders meeting to deal with the crisis, he made a decision to go with the g 20. hereto for you had the g7 finance ministers, g-8, and there was a g-20 group including central bankers. he thought the g-20 group was more representative of the global economy. he rightfully had some concerns and said, would there be a constructive outcome? one of the things he asked before hand was he asked me to

take a quick sounding to the president to see whether the chinese were willing to assume a leadership role or play a constructive role and they got back very quickly. which i think then made it easier for president bush to decide to go with the g-20, which obviously made a lot of sense. >> sticking with the financial sector -- what is the number one priority in terms of reform that china should look to in the financial sector? to come down to number one, i think, is difficult. there are several things that they need to do. one thing i would look at to see how serious they are about

reform is to say, will they open up their markets to foreign competition? i don't know't -- of a single market where there -- efficient, world-class capital markets where you don't let the best institutions come in and compete. to run a world-class institution as a joint venture. so, the argument that i made to the chinese is if you let foreign banks come in, they are going to be regulated by the chinese. they will be employing chinese professionals. and it is only by doing that you will have world-class financial markets. things that i think are important to the chinese are that right now the private sector is not getting the capital base in the current

system. and having a really efficient capital markets, you are going to come up with a more efficient allocation of capital to the or. and the other thing is investors. -- do youin china have a bit of a real estate bubble. when you say where can they real estate money, is one of the few areas where they feel comfortable. investing. i argue, having world-class investing institutions in their will help china become a nation of investors and not just savers. have over savings in china for two reasons. one, it is fear-based. you don't have adequate safety net, social security and welfare, and the other is, they

don't get really good returns on their investments. so, interest rate liberalization will be really important. what happens is the chinese investors have two places to go, either in real estate or you could put it in a bank savings account and not get the rate of inflation. and then that is a subsidy that it passed on to state owned enterprises in terms of lower borrowing rate but it doesn't help the private sector and it doesn't help the chinese favor or investor. interest rate liberalization would be one thing to really look at. so opening up to competition you cannot world-class institutions. >> do you think they are likely to happen? >> i am optimistic because when you look at what they have done -- the chairman of pboc, their central bank -- he reached

retirement age and then he asks to stay on. he has been a big advocate of financial market reform. another, a real reformer, working with juan je in the old days and is now the minister of finance. chairedese sec, will be by a man -- i know him well, he was chairman of the bank of china. again, i think these are all very knowledgeable professionals, pro-reformers. but it remains to be seen. anywhere yould say , a certain amount of success, there is resistance to change. , i would just simply say, we

have a very different system but we have a vested interest in our system and they have vested interest in their system, so they are going to be anti- reformers. >> i want to switch to questions from the audience. --is is one from liuis what are your thoughts about the recent apple-china dispute? do you think it was necessary for tim cook to issue a public apology to the chinese people? read the same "wall street journal" and "financial times" article you read. so let me put it in perspective. china is a huge market. and all sortsnies of companies are benefiting greatly by participating in that

market. so apple historically had as sort of the factory of the world. apple -- computers, iphones , were assembled in china and sold in the u.s. and around the world. , as withhas happened economic growth and greater prosperity in china, it has become a big market, and market -- end market. it is the fastest growing market. some think it is the fastest market for smart phones in the world right now. so apple got a big percentage -- got a big stake in that market. and i think what you're going to andif foreign companies --

there's a good number of u.s. companies and other foreign companies who got leadership positions, they are going to be under a lot of rooney. a lot ofgoing -- under scrutiny and they are going to be held to a high standard by regulators. i am not saying all of this is fair, but i will tell you when the chinese look at what happens to some of their companies in the u.s., they don't always think it is fair. i would say the good news for apple and for the u.s. and for the chinese and for the world is that to the fastest growing export market, that a that is growing very quickly and it is very important to apple. is they wereened criticized on state tv.

thatstarted off arguing their customer service and business norms were the same in china as elsewhere. youat the end of the day, ended up apologizing. this is a big, important market. >> this is a question from daschle by him saying it right -- from a gw graduate student. two questions. i think you touched on the first one. do you think china needs to make political reforms in order to achieve a sustainable -- achieve sustainable economic growth? and the second -- what is the next most important economic growth engine for china in the next few decades? him would say first of all i did not talk about political reform. -- and i have

always believed -- that economic reform, economic freedom, greater economic integration with the rest of the world quite naturally will lead to more personal liberties, which it has overtimes, and political reform. now, the chinese political evolving.still the last transition, the one before this, the first time a sitting leader did not select a successor. this was the second one. understand way to china is, they look through the lens of political stability. so, before making any tough decision -- whether international relations, whether economic issues, environmental issues, whatever, they are going to say, what is the path that is going to give us the greatest stability.

is argument that i make speeding up economic reforms and political reforms rather than undermining stability is going to be the quickest path to stability. and i believe that will be the case, will prove to be the case for political reform. there is a lot of discussion and debate in china how the political reforms will take place. i think the general view is that will take place first within the context of the party, and experimenting with local election, the village elections, may be giving more real authority to the national congress, the people's congress. so, i do believe it is another challenge. and i believe that for economic -- for real economic stability,

it is going to continue political reform -- continued political reform is necessary. >> what about china's military, mr. secretary? should china expand its military and make it vigor? i ask you that given the backdrop of the islands which, i believe, is the u.s. name for the islands disputed between china and japan. going onurse, what is in the korean peninsula? , to be with that, i give you two senses on the second question. the biggest driver. , think it will be organization if they -- urbanization, it if they get it right. i think the productivity, if somebody goes from the farm to a second-tier city and their income goes from equivalent of $40 a month to 100 and they go to a first tier city, $200.

if they get it right and they get the consumption boost, that will be the biggest driver coming up with the urbanization model of economic growth going forward. ok. so, you've got a bunch of questions in there. ok. [laughter] >> i do. i threw them all in. >> make -- whether china should continue expanding the military , what i or you think about it is irrelevant. they will keep expanding their military. and from their perspective, our military spending exceeded the top 15 countries put together. , i always explain to them and to everyone, it is important for us to be strong in asia and

around the world economically, diplomatically, and militarily. and our presence in the asia- pacific has been important to everyone including china, because it is sure to stability. and you've got this trade and economic cross investment and growth that has benefited all of us. now you see the two troubling things that are going on. , thein the east china sea dispute between japan and china -- the japanese call it sent .ockatoo -- senkaku the merits, itt is easy to understand it from both sides. if you look at history there is

merit on both sides. -- the point the u.s. makes continually to both sides is there needs to be really good control right down to the boat .ommander great channels of communication at the top political level, top therery levels, because has been a lot of tension. that the optimistic is aoreign minister someone who speaks japanese, there is a japanese expert that he has selected to go into the will and that both sides be able to de-escalate.

stability is totally necessary for the kinds of economic growth that asian needs and the world needs, and for stability in the region. thethen, of course, in south china sea, that is different because this is territorial. china has territorial disputes .ith just about everyone philippines, vietnam, indonesia and various countries have territorial disputes among themselves. there are, we don't take sides. we simply say, listen, it is unacceptable, as it is in the east china sea with the japanese, that these be resolved peacefully. not with force, the threat of force or coercion, that they be resolved peaceably. we need some solutions in both the south china sea and the east

china sea. >> korea? how long will china let that situation continue -- >> again, i am reading the same newspapers you are. but looking from the vantage point of watching it closely and watching it when i was treasury secretary, in one although this is a more extreme the relevant -- virulent customaryth korea's disruptive outlandish threatening behavior. this is the worst form of what we have seen, number one. we've got to case -- take it seriously when you've got a rogue state developing nuclear weapons. i look at this with your point

in your question. of why a case in point u.s.-china relations are so important. when i talk about it, i say it is hard to think of any major problem in the world that isn't going to be easier to solve with the u.s. -- when the u.s. and china work together and would not be much more difficult to survey we were at odds with each other -- and would be much more difficult to solve if we were not -- at odds at each other. what will it take to get china aboard, and if we get china on board, it would be easier. on this one, it has been difficult because on the one hand, the chinese are very angry at the kinds of behaviors we are seeing with kim jong-il and --

kim jong-un and that regime. of the other hand, they props -- prop them up economically because they don't want a collapsed state on their border and south korea right on their border. the way i tend to think about it, it is highly important we be communicating regularly and doing contingency planning in terms of how to deal with the worst outcomes. the highest level we have the same interest, which is peace, stability, economic growth in china, asia, and around the world, but we need to be prepared in terms of how we are going to deal with -- even if they are not high likelihood outcomes, outcomes where north korea uses force or you have a collapsed state or what have you. >> we are out of time, but i do want to ask you just one more question from the audience --

what potential role, if any, do you see for internationals events and asian-americans in bettering and strengthening u.s.-china ties? >> well, that is a great question. i would just start off by saying the reason that i set up the paulson institute is because i believe there will be ups and downs in our mutual relationship based upon what the issues of the day are in beijing or in washington. andy's ome back to point, one of the disturbing things about military relations two china is our militaries don't like each other that much and we don't have the same level of trust as we have in the economic arena. and economic arena, there is tension, but that is the good news.

40 years ago ago we didn't have economic relations with china. we had no tensions. you always have tensions with your trading partners, but if there are problems there all ofds of trust in channels communications. we need ways the two militaries to work together on humanitarian missions, these dialogue which we are pursuing need to work better. but there's nothing like students. and the more knowledge we have of each other, the more we know about each other, the more we trust each other, the more we will like each other. it don't make adversaries -- is hard to become an adversary of someone you understand. and one of the biggest problems we have is we have very different systems and very different cultures. theone of the things that united states, what we don't do

particularly well, is others -- understand others'cultures and systems. we are so proud of our system and the way we are that we think what we have in every way is what is best for every other society. american students spend time in china, get to know chinese, and vice versa. -- iis going quickly to think it is very important for u.s.-china relations going forward. >> i think it is a wonderful know to end on. obviously we covered a lot of ground, much more to talk about but we will have to save it for another day. so, please join me in thanking secretary hank paulson. [applause] -- toyou for every everyone here at gw. [applause]

defense secretary chuck hagel speaks today at the national defense university. plans to discuss the strategic discussions. president obama will go to colorado today to talk about the state's newly-past gun-control laws. he will be at the denver suburbs of the denver police academy. he will call for universal background checks and congress to release both on a weapons ban and limit large capacity magazines. the president's speech will begin at 5:00 eastern. tonight a look at protest groups in america. our live discussion begins at 8:00 eastern and will cover the group code pink.

is a look. >> i am proud to be joined today by my wife kathy and brother, tom. >> we will stop again. >> and who else? >> please remove that woman. at a code pinklooking protest a recent congressional hearing. and we recently spoke with the co-founder about hope protest movements fit into the political discussion. tonight we will be joined by a author of the book "the politics of protests." the conversation has already started on facebook. let us know what you think at facebook.com/cspan. watch tonight's discussion. >> people always like to ask me, how did you come across this story? people always ask that.

what happens a lot of times if you find a news story when you are supposed to be working on something else, which can be frustrating at times. that is exactly what happened to me. i was doing internet research one day, and look of this photograph. ofs was on a department energy web site. they put up a newsletter for one of the department of energy facilities, and this said this month in oak ridge history, something along those lines. i loved this because there seem to be a futile -- beautiful vanishing point at the end of the room. a look at the machines with the dials and knobs, and i was so sucked into it. also, the women looked so lovely. i read the caption. it said these young women, many of them high school graduates from tennessee were enriching its uranium for the world's

first atomic bomb, however, they did not know that at the time. take up this weekend, the lives and work of women in atomic city. saturday at 11:00 eastern on american history tv. u.s. and turkish officials say secretary of state john kerry is traveling to turkey and israel this weekend to build on the nation's efforts to repair ties. he planned to depart next week for meetings in london and in south korea, china, and japan but has moved up the departure to this coming saturday. he will discuss the relationship between turkey and israel in regional concerns. secretary of state carry spoke yesterday about recent north korean rhetoric. he says the u.s. will do what is necessary to defend itself from north korea's nuclear threat. he made these remarks at a press conference at the state

department's. . >> good afternoon. it is a great pleasure for me to mr. yun as it is his first trip to washington. we're both delighted to start off this way. very close friends, countries that have traveled a very interesting journey together for 60 years now. we celebrate 60 years of this alliance. decades the republic of korea has worked side-by-side as stood up towe have

a wide range of challenges over that time, not just in the asia- parts ofbut in other the world. when you look back of a common commitment to the democracy, human rights and the rule of law, it is no wonder we have been such natural partners. which is in this moment of the 60th anniversary celebration, remains critical to american engagement in asia. it is a linchpin of peace and stability in the region. states are completely committed to deepening the relationship in the years ahead. that is one of the reasons why i next weeksiting seoul in the president of korea, the

republic of korea will be here washington in in early may to meet with president obama. today we discussed the issues you imagine we would, and even more. i will start with north korea. we have heard an extraordinary amount of unacceptable rhetoric from the north korean government and of past days. let me be perfectly clear here today. the united states will defend and protect ourselves and our treaty allies, the republic of korea. the foreign minister and i think it is important to stay absolutely focused on our shared goal of a peaceful korean peninsula, free of nuclear weapons. betweenoved relations north and south would ultimately help to move us towards the

goal. that is a stated goal of the new president of the republic of korea. we look forward to working with her to achieve that goal. we also discussed our collaboration on global security issues. south korea has done great work on the u.n. security council, helping to curve civilian casualties in combat work. they have done that work not just in the far east, but around the world. we are also grateful for south korea's continued commitment to reducing our iranian oil imports. this has not been easy. it is difficult, but they have played their role and taken their part in helping to have an change therying to behavior of iran. iran knows exactly what it needs to do in order to address

international concerns about the nuclear program. it can start doing so next week talks.the p5 plus 1 we also discussed ways to work closely on the humanitarian efforts. i think the republic of korea for their support on humanitarian concerns. we also have shared initiatives in sub-saharan africa. we thank them for that. ,n terms of bilateral issues the foreign minister and i both want to promote this move the implementation of u.s. correa free trade agreement. this agreement is good for both countries. growth and help create jobs in both countries and regions. we also had a good discussion on the bilateral civilian nuclear agreement.

we have a long record of close collaboration on this issue. we are committed to finding a workable, expeditious way forward. finally, we are both a deeply concerned about addressing the issue of climate change. we will have further discussions when i go to seoul next week. we both support clean energy development and will work for ways to work closely on issues. as we enter a time of new negotiations on climate change over the course of the next few years. so this was a very productive meeting. i hope the first of many in the years ahead. mr. foreign minister, i look forward to seeing you again in a very short time, and i think you for your commitment to this important partnership. i think you for taking the time to come and visit today to prayer -- prepare for the important meetings of our leaders in early may. thank you.

>> thank you. i wish to thank the secretary general -- the secretary for his invitation. as secretary carey explained, we have an excellent meeting today. we discussed a wide range of key issues, including our alliance, north korea, a regional and global agendas. as secretary kerry mentioned, this year marks the sixth anniversary of the alliance. symbolizes0 years maturity and wisdom as we celebrate what many describe as one of the strongest alliances in history. we reaffirm the need to further consolidate the comprehensive strategic alliance in the 21st century. in this regard, we share the view of the united states, this

will be the very first overseas visit as head of the state. year-oldelevate our 60- alliance to new heights. we pledge to make every effort to ensure a successful summit. else, in anything discussed the serious nature of the security situation on the peninsula,-- korean including north korea's nuclear testing and threats from the north. we agreed to further strengthen credible and robust deterrence's. the secretary and i expressed satisfaction over the progress made in the deterrence encounter propagation plan. i reaffirmed that my government's strong commitment to work closely with the united

states on north korean policy. secretary perry and i agree that north korea -- kerry and i agree north korea should abandon its nuclear ambitions and dangerous rhetoric. we agreed to collaborate full implementation of the u.s. secretary council resolution. i also reiterated my government's trust as the north korea makes the right choice. i also emphasized that peasant -- present and past the policy to promote peace in corp. lies in the united states policy towards asia, and that they are mutually reinforcing each other. as we celebrate the first will impose the agreement.

i took the opportunity to reaffirm my government's strong commitment to open the economy and free trade. moreover, i stress the importance of further strengthening our corporation in the field of science and technology, renewable energy, space, and climate change. finally, i stressed to the secretary of the importance of revising the nuclear cooperation agreement in a mutually beneficial, timely, and 4- looking man there. conclude by saying that i am pleased with the results of these meetings. i look forward to welcoming the secretary next week. thank you very much. >> we will take four questions today. we will start with cnn.

>> thank you. i would like to ask you about what you think north koreans intentions are. the you think these threats are just blusters? specifically the threat to restart the nuclear facility, and is there a danger of not taking these threats to seriously that it might provoke them to actually doing something, or is there a chance that they could pull back and be ready for diplomacy at some point. mr. foreign minister, the six party talks in the whole process is always really relying on china to rein in the north. lately it does not seem the north is listening to china in any meaningful way. i am wondering if you think this is a safeguard that the parties cannot rely on any more. has the influence china had been used up? thank you. role,arding china's

lately in the adoption of the u.n. secretary council resolution, china is now very cooperative. they made it very clear they will fully implement the resolution of the u.n. council resolution. regarding the six party talks, in this resolution, six party members and members of the council made it clear. the six-party talks is still a very useful talks -- tool to implement efforts in the nuclear weapons program. even though this is a very difficult task, we believe with china and many members of the six-party talks, we should continue these efforts. thank you. speculatet going to on what the intent is or whether there is a strategy or not a

strategy. whatottom line simply is he has been choosing to do is provocative, dangerous, reckless, and the united states as a not accept the dprk nuclear state, and i reiterate again, the united states will do what is necessary to defend ourselves and defend our allies, korea, and japan. we're fully prepared incapable of doing so. i think the dprk understands that. lightly,, no one takes least of all the president of the united states, what has been happening, which is precisely why the president made the decision to redeploy missiles the fence with respect to the as well as to

make other preparations in the region and send a very clear signal to allies in north alike that the united states will defend its allies and that we will not be subject to a rational provocation. but, and here is an important clear as we have consistently that the united states believes there is a very simple way for north korea to rejoin the community of nations and make it clear they want to pursue a peaceful path. they could come back to the use -- come back to the table and join all of the other countries, including their nearest neighbor and partner, china, obviously shared with the republic of china has such an and hast role to play

always maintained a closer relationship to the north than any other country. so they have an option. to enter into negotiations for denuclearization, which is china's policy also, and to begin to focus on the needs of their people, which we all so have made clear we are prepared to help them with, if it will bring their behavior in line with the united nations and local community requirements. so it is very simple. we're going to proceed properly and carefully as the president has indicated, but we take nothing for granted, and we also are not indifferent to the meaning of the risks that are involved. you believe it will restart the nuclear facility as

they have written to do? take a first of all, that is in direct violation of international obligations. oft itself would be a breach international requirement. it would be a provocative act. it would be completely contrary to the road we have traveled all of these years. we will have to wait and see what happens with respect to that, but it is a direct violation and would be a very serious step. first question goes to secretary kerry. right now a lot of people are deeply interested in the /corrkorea of the u.s.

agreement. people are concerned that if this is not accepted, this may harm u.s. career relationships. if you have any intention of proactively accepting the request? we welcome, president obama and the united states welcomes south korea's emergence as a nuclear energy leader, peaceful energy leader. we are working together on the civil nuclear agreement that will build on a very strong -- strong nuclear energy cooperation that we have enjoyed for literally over 50 + years. we see no reason that will not continue in an agreed upon fashion. the prime minister and i had a very good discussion about that agreement.

we have exchanged ideas, and i will follow up on those when i visit in a week. i am very hopeful, and i think the prime minister shares this hope that this can be resolved before the visit of president park. we're quite confident this is a relationship that can and will continue in its proper form. >> scott stearns. >> mr. secretary, in cairo last month to free up $250 million in additional support for the morsi government following promises that he would make political and economic reforms. since then, the government appears to have spent more time pursuing [inaudible] then those responsible for sexual assault. was that the expectation.

the government has said this week and that it will do that. take up think you. we shareect to egypt, a very real concern in the obama at fenestration about the direction that egypt is apparently moving in. points really a tipping for egypt. we have been working very hard in the past weeks to try to get the government of egypt to reach out to the opposition to come to an agreement which will improve the lives of the economy and the lives of citizens. we share with everybody

concerned about the political and economic challenges, and i communicated those concerns with everyone when i was there. i met with the civil society. i met with opposition. i met and talked to members of the business community and members of the government. we have put a series of very real choices to the government of egypt, but in the end, they have to make those choices. the imf is going there this week. there will be discussions with them, but it is only fair to say president obama and the administration share real concerns about the direction that egypt appears to be moving in. it is our hope there is still time to be able to turn the corner. and the recent arrest, violence in the streets, lack of inclusive it be with respect to

the opposition and public ways that make a difference to the people of egypt are all concerned today. president obama would make it clear to everyone the united states when there, as i said, not to support anyone person, and certainly not to support one party over another, but to try to help the people of egypt to realize the dreams they expect -- expressed in the tahrir square and the dreams they have tried to put into reality through the democratic process. i think there is still time for the promise to be delivered. in the end, it is the government of egypt and people of each of that will make that decision. syria.nd amwith respect to iraq, i

encouraged the prime minister responded to the request with respect to the iraqi air space into syria. we are working right now with the government on several things. one, the question of how those inspections might take place and how frequently. number two, we're working on trying to bring those together with the prime minister in a discussion that hopefully can bring people back together and get the democratic process back on track. there has been a real breach of that with respect to the kurds. the present has not visited baghdad in about two years. theyently they feel as if have been pushed away from the governing process. democracy is hard. it is hard work. particularly hard work for people who have not experienced

it ever or recently. closelyeed to work together, which is what we're doing right now with hopes the prime minister will make the right choices to bring people together to offer people of united election when it takes place in a few weeks, and ultimately the democracy that americans invested in so heavily with their treasurer of young men and women who gave their lives, and with a large amount of american taxpayer dollars. take the last one today. -- >> last one today. >> [inaudible] >> with its three in peninsula peace process, my question is,

do you have any plans on suggesting dialogue with the north koreans first? for instance, reopening the tourist visit, and my question going out to secretary kerry, ever since you were a member of the senate, i know you have always stressed the importance of diplomacy and dialogue. i knew this was one -- no this is one of your standing principles. i know you spoke about a kind of principle when dealing with the north koreans. under what circumstance or situation with the united states be prepared to resume dialogue with the north koreans? any specific conditions in mind in order to resume dialogue with the north koreans? if so, do you have any plans on sending a special envoy. first of all, the situation

on the korean peninsula, tensions are getting higher, and it is critically important for the u.s. and south korea to enhance the defense capabilities, and we will north koreanse of provocation, but if north korea decides to give up the nuclear ambitions and to become a member of the international community, we are prepared to resume our talks in terms of putting in place of peace process on the peninsula. north korea needs to make it clear they are prepared to of a serious discussion about denuclearization. they know exactly what the goal is. they know exactly what the terms are. we are prepared. present obama has said repeatedly, we are prepared to

enter into a dialogue negotiation. we have always said three would like to resolve the problems of the entire peninsula. that means making peace. they know very well with the terms are. we have an envoy. ambassador glenn davies is appointed already. he is here. i would just say this, i think we face thisnt,

danger, not just to the republic of korea but a danger to the entire region and the world of the proliferation of nuclear weapons. and we face it with respect to iran. president obama could not have been more clear with respect to both. his policy is the denuclearization of north korea because that is the only way to begin to end the conflict and create safety in the region. the last thing the world needs is more nuclear nations at the very time the nuclear nations are trying to reduce their current number of nuclear weapons and control this danger. secondly, we face the question of iran. iran knows very well it has an opportunity this weekend. the iranian people are great

people. they have a long history. many times longer than the united states of america. thousands of years. they have an ability to rejoin the community of nations to get out from under this isolation. if they will choose the simple ways of proving, as other nations proved, that they have peaceful nuclear energy. it is that simple. it is not complicated. our hope is that that initiative can begin in earnest this weekend where we will have a team prepared to negotiate and in the days ahead we can reach an understanding that will also move as we are trying with respect to the caribbean peninsula -- korean peninsula to make the world safer. that is what this is about. we have no ambitions there, and i think they know that. we want to see a peaceful community of nations treated with each other, working to

improve the lives of their citizens, and that is in direct whichst to the north, maintains kulaks, has thousands of political prisoners, treats people in the most inhumane way, and now starves their people in order to build nuclear weapons. that could not be a bigger choice. that is the choice we are standing here presenting to the community of nations that have made a different choice. very much.ank you vethank you [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]

>> that meeting took place yesterday. the secretary of state heads to turkey and israel this coming weekend discussing relations between all free nations, along with discussions about syria and the middle east process. next week's meetings in london, south korea, and japan. a quick reminder that the defense secretary will talk about the strategic and fiscal challenges facing of -- facing the defense department. yesterday he announced he would give back part of his pay to join in the solidarity of employees facing furlough. live coverage here at 12:30. todaybama in colorado focusing on gun-control laws. he will focus on universal background checks and calling on congress to vote on an assault weapons ban and limit high- capacity magazines. what his remarks at 5:00 eastern live here on c-span.

tonight with the protest groups in america. a live discussion at 8:00 eastern focusing on the group, code pink, which often interrupts congressional hearings. we will talk to the author of the politics of protest, also a university of california professor. we will also look for your reaction. it all begins at 8:00 eastern here on c-span. >> this is a third prize winner in c-span's student cam competition. his message to the president focus on government waste and the misuse of taxpayer dollars by some federal agencies. >> it's no secret that our government wastes more money than most americans could realize or even possibly imagine. >> every year we spend more than we take in. our national debt just gets

higher and higher and higher, and at some point the future generations are going to have to>> and it's not just the amount of money government is spending that is a huge problem, amount of money we are borrowing each year. >> according to the u.s. debt cost, an incredible 36 out of the last 40 years, our government happens spent more money than it has brought in. for example, in 2011, federal tax revenue was $2,170,000,000. the federal budget was nearly $4 trillion, creating a deficit of $1,650,000,000. that was a huge factor in driving out our nation's debt to over $16 trillion. >> $16 trillion of debt, where does it all go? the answers to some of it may surprise you. this piece of paper is circling around washington tonight.

republican senator tom coburn said he's unearthed $18 billion in wasted government spending. >> we're subsidizing the promotion to consume caviar. >> but the senator's waste report flags other controversial expenses. food stamps being misused for booze and spent on high-end starbucks coffee drinks and fast food runs. >> if you're looking at the food stamp program, it doesn't make lot of sense to say that you're providing for people without means and then you're giving them junk food. >> i think 90% of the department of agriculture's budget now goes for food stamps. >> $1 million are being spent every year by nasa to develop a menu of food to be eaten on mars. at a time of layoffs at that agency. and the lake marie airport in oklahoma, just one plate a month, but it gets $150,000 a year from the f.a.a. the oklahoma airport's commissioner told us the only reason he keeps it open is to keep getting federal dollars

that he uses on other airports. >> is there anybody in the world who would say no thanks, government, we don't want this money? >> chances are when you think nonprofit, you don't think the national football league. after all, the nfl pulled in more than $9 billion last year, but the league calls itself a nonprofit organization and avoids paying some $40 million in taxes every year. >> what about $1.2 million to national science award to study effects of world of war craft on memory of seniors? >> ironically, over $2 million per year is wasted by the department of energy for failure to turn off the lights. speaking of waste, the federal government recently spent $1.5 million renovating 36 toilets at denali national park, alaska. that's about $40,000 per toilet. each year, government agencies rack up almost $1 billion in unnecessary printing expenses. take a look at this.

here is called the federal register. for decades, copies have been printed, bound, and sent to thousands of government offices all across the country. no one reads this thing. that's because it's been available on the internet for years. that means taxpayers have been funding some pretty expensive door stops. >> the federal government owes trillions of dollars to china. what most americans don't know is that a lot of that money borrowed from china is used for foreign aid back to china. >> because of our inability to maintain our fiscal house, we are losing our position as a leader in the world. theid you know that department of defense wasted over $100 million in unused flight tickets and never even bothered to collect the refunds, even though the tickets

were fully if he fundable? >> the white house has warned the government not to spend taxpayer dollars like monopoly money. you would think no agency would think a christmas party at taxpayer expense. what if they called it a conference and shelled out $5 million? >> f.a.a. officials were in atlanta celebrating the year-end holiday with great relish. flushed with $81 a day of f.a.a. expense money. >> the general services administration, basically the facilities manager of the united states of government, the mission is to exemplify efficiency, cost cutting, a tax they felt would best be expressed by a lavish $822,000, three-day las vegas conference. >> more than $1 hundred,000 just to plan the four-day las vegas conference. clowns and a mind reader. >> $75,000 in a training

exercise to put bikes together. >> a final head-spinning price tag, $823,000. >> the final event of the conference was a video contest, and the winner saying about his wishes to waste government money, while his agency was wasting money. >> you think that was fun? that was amazing. i'm glad you won. >> step into the spotlight. receive some more applause. >> mr. neely, did you attend 2010 western regional conference in las vegas? >> mr. chairman, on the advice of my counsel, i respectfully decline to answer based upon my fifth amendment constitutional privilege. >> i think the government agencies have almost gotten incestuous that, ok, i'll look the other way on what you're doing if you look the other way >> we're facing a very serious fiscal situation. the last four years we've experienced deficits of over $1 trillion a year. we've never had a trillion

dollar deficit. >> we're running trillion dollar deficits. the way you get rid of it is a billion at a time. >> it's almost designed to create waste. the system will have to change for the waste generation to slow down some. >> i think you'll find both sides, my party, the left will be saying no changes to entitlements whatsoever. the far right, they'll be saying no revenue whatsoever. something somewhere between the 40-yard line. >> when reagan was president and tip o'neill was speaker of the house, and those are both extremes of both of the parties at the time, but they were willing to compromise and do something for the good of the american people. >> no amount of waste is acceptable, not when it's your money. what should be easy is getting rid of the pointless waste and stupid spending that doesn't benefit anybody. >> it's not acceptable if it really constitutes waste. >> you can't be 100% efficient all the time.

but i think the level that the waste is at is unacceptable. >> i don't think there's a way you can cut out all waste, but i think there's no question that our government's waste goes way beyond anybody's normal definition of acceptable. >> so i ask you, mr. president, how do we get rid of the waste and debt that plagues our nation and restore hope to future generations in this disgraced all the other winning documentaries at studentcam.org. of international security and international conduct for space exploration. frank rose spoke for about 45 minutes. the obama administration released this in 2010. it urges international cooperation to prevent incidents or mishaps.

>> thank you all for joining us this morning. at the international institute for strategic studies u.s., the washington home of the i w s. we're very pleased to welcome frank rose, a deputy assistant of state for space and defense policy to speak about u.s. priorities for diplomacy in president obama's second term. withis a global think it four fully-fledged offices, and also in singapore and in washington. offices grew out of the regional dialogues, that the institute as dialogue -- piled on over the decades. the institute also publishes survival, the quarterly journal of international affairs, the

2013 addition just launched last week and a book series, some of which are on display in the back. partoffice is a critical of the broader network. we seek to bring a global perspective to washington and to convey washington's perspective to a sometimes skeptical international audience. i should mention it is a membership organization, and for those who are not members can find information either at the back part on the website ii ss.org. and about us. we're here today to hear from frank. us well, it is a global think tank with our mother ship in london and here in washington and singapore. decade. these two also publishes bring washington's perspective to a sometimes skeptical audience. it is a membership organization back or on our website. enough about us. we're here to hear from frank. his potion at deputy assistance secretary, frank is responsible military response policy. he held various positions in the u.s. house of represents on the house committee on intelligence

and in the offices of to the secretary of defense. he received his m.a. from college in london. having worked with frank in the arms control bureau in the state department, i can tell you one more thing about him. he takes diplomatic engagement seriously. in a bureau with leadership that does a lot of travel i think frank has the record for most miles flown. i want to use the opportunity of his rare presence in washington to let frank give something of an extended troop report on the state's related engagement over the past few years. with that, i will turn it over to frank who will talk for 20 minutes. i should remind everyone, we are on the record. thank you very much for the kind introduction. it is great to be back.

i spent many hours in the libraryhe takes diplomatic engagement at the old headquarters. i am dating myself. i am dating myself. i am pleased to be here today to talk about space diplomacy in obama's second term. this morning i would like to focus on three issues. first i would like to outline the challenges to the space environment, including space debris and anti-satellite capabilities. second, i will explain how president obama's 20 national policy seeks to respond to these challenges and i will describe some of the specific initiatives we are working on to implement the president's vision. let me start by discussing the challenges to the space environment. the benefits of space per me a almost every aspect of our daily lives.

for example, information derived from space systems helps us with natural disasters, facilitate transportation globally, revived global access to financial operations, and other activities worldwide. environment space has changed in fundamental ways since the beginning of the space age 50 years ago. states and the soviet union operating space systems. today, over 60 nations operate space systems as well as numerous commercial and academic congested. for example, the u.s. department of defense tracks over 22,000 objects in space larger than 10 centimeters of which about 1100 are active satellites. there are also hundreds of

thousands of additional objects to small to track but are capable of damaging satellites in orbit in the international space station. over the past five years, we have seen a dramatic increase in the amount of debris. the first was china's thai satellite test in the second was the collision between a defunct russian satellite and a commercially operated satellite. these events are responsible for 36% of all of the trackable debris in low earth orbit. the threat to the space environment will increase as more nations develop and deploy counterspace systems. therefore it is clear that space is also becoming increasingly

contested. today, space systems and their supporting infrastructure face a range of man-made threats that may degrade, disrupt, or destroy assets. as director of national intelligence james clapper testified, space systems and their supporting infrastructures enable it wide range of services. other nations recognize these benefits to the united states and seek to counter the u.s. strategic advantage by pursuing capabilities to deny or destroy our access to space services. threats will increase during the next decade as disruptive and distractive counterspace capabilities are developed. irresponsible acts will have implications beyond the space environment, disrupting did worldwide services upon which civil, commercial, and national security sectors depend.

in particular we continue to be concerned about the development of china's altai faceted anti- satellite program. given the increasing threat through irresponsible or unintentional acts to the long- term sustainability, stability, safety and security of space operations, we must work with the community to preserve the notingenvironment for all the challenges to the space environment cannot be solved by one nation alone, president faces a highpolicy priority on extending international cooperation to maintain the long-term sustainability and security of the space environment. introductionthe states, irresponsible acts have damaging consequences for all of us, all nations have the right to use and explore space but with that right comes responsibilities.

the united states calls on all nations to adopt approaches for responsible activities in space to preserve this right in benefit for future generations. the national space policy directs a couple of key goals related to international affairs, even include expanding international cooperation on mutually beneficial space activities to broaden and expand the benefits of space and further the peaceful use of space. and to strengthen stability in space through domestic and international measures to promote safe and responsible use of the domain. improved information collection and sharing for space collision avoidance and strengthening measures to mitigate orbital debris. in pursuit of the goal, the policy directs departments and agencies of the u.s. government, in consultation with secretary of state, to

strengthen u.s. leadership in space-related activities such as the un community and peaceful uses of outer space, identify areas for potential international cooperation, develop and pursue bilateral and multilateral transparency and confidence building measures to encourage responsible theons environment through development and adoption of international policies to minimize debris such as the united nations debris mitigation guidelines. let me discuss some of the specific initiatives we are working on to implement. on january 17, 2012, hillary clinton announced that the had decided to work with the european union and other nations to develop an international code of conduct.

she stated "the long-term sustainability of the space environment is at serious risk from space debris and irresponsible actors. unless the international community addresses these challenges, the space environment around our planet will become increasingly inhabited which will create damaging consequences for all of us." it would establish guidelines for responsible behavior to reduce the hazards of debris generating events and increase the transparency of operations and space to avoid the dangers of collisions. the united states believes that the european union' is a useful starting point for developing a consensus. we look forward to participating in the open ending meeting that the eu will be our hosts, the

ukrainian government this upcoming may. these will provide an opportunity to address all elements of the draft code. the united states looks to find agreement on a text that is acceptable to all interested states and bring benefits in a relatively short term. i would also like to discuss work of the group of government experts on outer space transparency and confidence building measures, established by the un general assembly. the purpose is to examine options for establishing bilateral and multilateral tcmb's to help the space environment. representatives from 14 nations, including the united states, serve on this gge. the first meeting was in new york city.

the key objective is to develop a consensus report that a list of hermetic space tcbm's. legally binding arms control is outside of it. it will hold its next meeting in geneva next week. the goal is to finalize the report by july of this year. another area where we are discussing space security is within the group of g8, which conducted its annual meeting last may. in its role, as president last year, the united states introduced discussions on the long-term sustainability and security of the space

environment within the group. in the nonproliferation director statement, it just sustainability and security in detail. in particular, outer space activities play a significant role in the social, economic, scientific and technological developments of space and maintaining international peace and security. express concern about the growth of orbital debris, which presents an increasing threat to space activities and welcomed the current efforts aimed at establishing a strong consensus on an international code of conduct for outer space activities. we expect space security to remain on the agenda this year with the assent of the uk. at the multilateral level, we have expanded our engagement within the united nations committee on peaceful uses of the united states on the development and adoption of international standards to minimize debris. the united states is taking an

active role in the working group of the scientific and technical committee on long- term sustainability. this working group will be a key forum for the development practiceational best guidelines for space activities. the united states is serving as the cochair of the expert group on space awareness, demonstrating our commitment to making progress to enhance space flight safety and preserve the use of space for the long- term. to goal of the un is finalize a report and guidelines by the end of 2014. let me also now discuss some of our own ongoing dialogues on space and security with key nations. over the past three years, we have a number of my lateral dialogues with key nations to discuss space and security

issues. these include discussions with traditional allies, france, uk, canada, japan, as well as discussions with new partners, south africa, brazil, india. we also have a robust discussion with the russian federation on space security. we are also trying to engage china on security. we think china is important that the united states and china begin this discussion. first, the united states and china have an interest in maintaining the long-term sustainability of the space environment, especially limiting the creation of space debris. it is important we discuss these issues bilaterally in order to prevent misperceptions and miscalculations.

the united states plans to continue to improve our efforts to discuss these issues with china. let me conclude by saying, as clinton said in her january 2012 statement, the long-term sustainability and the security environment is at risk and unless we take action to reverse these trends, or it have damaging consequences for all of us. united states, working in conjunction with its friends and partners, and is pursuing a comprehensive approach to responding to the challenges to the space environment. this response includes top-down political elements, like efforts to develop an international code of conduct, and technical elements like the work of the long-term sustainability working group of the un. the ultimate objective is the same -- to reverse the troubling trends that are damaging our space environment and preserve

the limited list benefits of space for all nations and future generations. thank you very much and i look forward to your questions. >> thank you very much. i guess i will start with a question before opening it up. you have discussed how the various how the work is more on a technical level. the code of conduct is top-down. where does the gge fit in and how much does the gge and code of conduct negotiations over lap or reinforce one another? >> a couple of points on that. i would say that gge is really focused on the political side of the house. it was established by the un general assembly. we will eventually present a report to the secretary-general

and our guess is that he will likely send that to the un approval. the second point, you talked about complementarity. we see these as mutually reinforcing. be work of the gge will enforce the work we are doing in the code of conduct. how will we make sure that happens? another good thing is that you have the same group of people that are working these issues across the foreign, for example, the u.s. representative with the gge and the eu. my staff is working with the oceans environment and science, which has the lead for the un to ensure that everything we do

is fully consistent. kind of a long answer but we believe, as i said, different efforts but we have one objective, maintaining the long-term sustainability of the space environment. >> thanks. i would ask you to give your name and affiliation before you ask your question. right here. we have a microphone coming to you. >> that is an excellent question. a couple of points -- the national space policy directs the u.s. government to look at issues associated with active debris removal. that is removing large pieces of debris in space.

i always like to point out there are serious political, technical, financial and legal issues associated with that. for example, one person's debris removal system could be another's anti-satellite weapon. we have begun a review, which is being led by the national security council and the office of science and technology, to implement the direction we received from the president to examine this active debris removal issue. we are very early in the process. we have had some limited engagements. what i would say, there is a lot of issues but we're looking at it closely. legality, aside the what are some of the, since to do that? >> i know the swiss, for

example, have opposed this thing like a vacuum cleaner. there are a number of other technologies people are looking at, lasers. i am not an expert on the specific knowledge ease. i am much more focused on the policy. there are also a number of other companies in the united states that are beginning to look at this. i think it is important, given these political, financial, technical and legal issues, to study this issue and make sure we understand the application. the u.s. government has not made a decision on active debris removal. we are studying it. >> an adjunct professor at johns hopkins. first a comment on the talkinggy, finally

about two years ago, a program on their website. you discuss some of the technology they are looking at. my question for frank, i was ing gaspingn january and for breath, having some discussions with some counterparts. i sense that with the chinese, it would be too much to say they are favorably inclined that they are less unfavorably inclined about code of conduct. you you found that and can go into more detail about what you see vis-à-vis china? >> let me go back to my statement. wants gaspingted states to have a dialogue with china

for two reasons. one because we both have an interest in maintaining the long-term sustainability of the space environment. let me tell you a story. many of you have heard this but some of you have not. many of you know that our joint space operations center, which is located at the air force base in california. conjunction notifications to numerous government and operators around the world. including china. if two satellites come close to each other, we will notify the operator so he can prevent a collision. about three years ago when i first took this job, one of these applications was brought to us, to me, to sign off. a piece of debris from china was coming close to one of their own satellites. my first inclination is -- why

reward bad behavior? then i caught myself. i came to the conclusion, if that piece of debris hit china's satellite, that could create more debris and endanger our satellite. i am sincere about this -- the united states wants to have a dialogue with china about this. bruce, i have seen over the last six or seven months a much more active approach with china on china's behalf on engaging the united states on space security issues. i have discussions with officials. i think china is coming to the view that it is important to engage on these issues. the proof will be in the pudding. as i said before the united states believes it is vital that we have this dialogue, not just to maintain the long-term sustainability of the space

environment but also to prevent misperceptions and miscalculations. the united states and the soviet union did not agree on many issues during the cold war. but there was an active dialogue on these types of issues which help manage misperceptions and miscalculations. this is an important area where we think we need to have a discussion with china. thehat i am interested in, chinese expressed -- they sounded sincere for those notifications. it was not the usual propaganda. they genuinely seemed grateful the u.s. gave them notifications. >> let's take two and then frank you can respond to them. >> i'm curious how the code of conduct, how much is there from

countries like brazil and others you mentioned that you are having bilateral discussions with? thank you. >> i wanted to raise the subject of the announcement the u.s. is going to deploy 14 -- you had mentioned it in our to engage the chinese, given the inherent capabilities of ballistic missile interceptors and the fact that all of these interceptors are going to be on the trajectory of any chinese second strike attack on the united states, isn't this going to complicate our efforts to constructively engage china? >> thanks for both of those questions, even yours, greg. [laughter] here is what we hear from people around the world. every been just about

continent except antarctica. generally when you look at the code of conduct, it is generally acceptable. most major nations say it looks pretty good. there are some changes that we would like to see, as colleagues from russia, but even they say this is basically the un general assembly resolution. on the substance, there is a general agreement. the real challenge with the process has been a lack of outreach and the need to get that process together. i think that as a result of a couple of things. the european action service has stood up. the good news is this -- they have just appointed a new special representative for

nonproliferation in poland. he is the former direct your of security policy studies as well as the former head of the wmd center. he has a lot of expertise in multilateral diplomacy. he and i have had consultations and he has had consultations with numerous nations around the world. he understands the challenge is with the process. he is determined to get it right. i think that is the challenge with the code. with regards to your question, secretary hegel said the decision was driven from the threat from north korea. we have a dialogue that my boss, acting under secretary, missile-defense is on the agenda.

a couple of points about missile defense, the ballistic missile defense states we do not seek to undermine strategic stability with russia or china. notmissile defenses are directed against china. we will continue to engage china on issues. it is not going to be it is going to be missile-defense, nuclear issues. we want to prevent the possibility of a misperception and miscalculation. i know the chinese have some concerns. we do not think those concerns are warranted. we will continue to discuss and engage with them on the issue. not just it missile defense and other issues on the bilateral agenda. >> two in the back. right there.

>> frank, i really appreciate all of the outreach or office does. something that concerns me is how do you envision budgetary concerns affecting your work? >> can we take one more from right behind her? >> hi, i am steve from osd. wasfirst question that about remediation. i would like to ask you about mitigation. top do you see as the opportunities to prevent more debris? i can see strengthening the un guidelines technically or by trying to get more people to sign up to them or by strengthening our u.s. government debris practices. or by making more of an effort

to mystically to adhere to those practices or perhaps something else. what do you see for increasing mitigation? >> the first question about the budget, we will have to see. right now i will continue to do what i have been doing until they say there is no money. we will have to see. with regard to mitigation, let me start by saying i think the u.s. has one of the best records with regards to debris mitigation. this is one of the issues at the international level we are looking at in the un committee on peaceful uses of outer space. we actually have a working group on debris mitigation. someone on my staff is leading that. i do not have the specifics because i am not the technical expert. i know they are looking at that

in detail. when they finalize their report in 2014, there will be a couple of recommendations. at this point, i do not know what list of technology will be there. i can only say we are looking at it actively and i would say the u.s. has a good track record domestically. >> any other questions? but to me ask frank about the code, can you talk more about what you expect from the may meeting? is it open-ended? do we expect a particular outcome, if not in may then there is a schedule of meetings? and then a broader question, can you talk about why -- implicit in your remarks is an assumption that space is not amenable to legally binding arms control measures. an you give us a bit of

explanation as to why it is more of an area consistent with legally binding treaties? >> two good questions. theme talk about multilateral process. as i mentioned in responding to jennifer, that has been a weak point of the eu's process. i think they understand that. ist they are going to do they have set up a series of open-ended consultations. the first meeting will be in kiev in may,. what i understand, based on my discussions, the object if it is to discuss the key issues and concepts within the code. geithner stand they will

probably reduce another draft based on those discussions. and then there will be a series of additional open-ended consultations. i do not know exactly how many. i think it will depend on how long it takes to get critical mass. with regards to your question on legally binding, the national space policy does talk about legally binding arms control. the previous policy said the united states does not do that. this policy goes back to the long-standing principle with regards to space arms control for the united states. it says the united states will consider arms control proposals

and concepts that are effectively verifiable, equitable, and in the interest of the united states and its allies. armshallenge with a space control is verifiability. how do you verify these capabilities, which is very difficult to do. the other issue has been the issue of how you define a weapon in outer space. that has been an issue that andle have been going back

forth on for over 40 years. my general view, and there is a wonderful book called "politics of space security." one of the things he argues in this book is that when there have been major agreements and successes with regards to space security, it has occurred when there was an intersection between security and preserving the space environment. a wonderful book called "politics of space security." one of the things he argues in this book is that when there have been major agreements and successes with regards to space security, it has occurred when there was an intersection between security and preserving the space environment. for example, in the late 1950s, the united states and the soviet union tested nuclear weapons in outer space. they did it and they severely damaged their own satellites. we had the limited test ban treaty in 1963. it is both an environmental treaty but also a security treaty. the un debris mitigation guidelines is another example. what we are trying to do in the obama administration is to focus on that intersection between security and sustainability. >> ok. is there any -- right here. >> i was looking for background

-- >> can you identify yourself? >> i'm with princeton university. some background on what i think are two salient issues. one is that we are proceeding, 2a is scheduled to be deployed. these are ready to shoot. they are fully capable of engaging satellite has deployed in their current configuration. i am sure if china were to deploy them, we would not have a lot of doubt about that as far as verifiability. we would know they are capable of engaging satellite. that is not uncertain at all.

meanwhile, the code of conduct's language has evolved one iteration after another, more and more in the direction of not putting impediment to the testing and development and use of anti-satellite weapons but also being a missive of their possession and of their use under the inherent right of self-defense, although no one would say the non-binding code of conduct, specifically in the context of destroying satellites unless it is setting and providing an affirmative permission to use it in self-defense. obviously therefore to develop them and to possess them. it could even be fully tested without the doing a test against orbital objects. it seems to me as though we have abandoned any hope of not having a future in which many

agents possessing at least anti-satellite weapons in space. >> that is the question. dualof these systems are capable systems. you really can't verify how these systems -- what i would say, the focus needs to be upon actions. one of the key elements of the code is section 4.3 it says nations will refrain from actions that create long-lived debris in outer space. the problem we have is verification.

maybe in the future we will be able to get around the issue of verification and solve that problem. right now we have not seen any arms control treaties or proposals that meet the criteria laid out by president obama in the national space strategy. thatquick follow-up, is like saying we do not need nuclear arms control,maybe in 's agree not to have nuclear war? >> what i would say, with all agreements, a key element, is it verifiable? i would argue the treaties are verifiable. i would argue space arms control with our current technology is not verifiable. >> i disagree with that. >> we had a little bit of a discussion about this before, but i wonder -- i suppose

missile and nuclear weapons impede on space. cybersecurity concerns, cyber tcbm, how are they linked? >> i think there is a big link, sam. necessarilyave to attack a satellite in space to disable the satellite. cyber is another way to go after these issues. there is a definite link. in our discussions with the department of defense and other elements in the u.s. government, we are talking about that. in addition to the space gge, there is a separate information gge. i am in close contact with my colleague there. >> will that be reflected inin h

some of these documents or will they be kept separate? >> for the time being, they will be kept separate. but as things evolve in the future, that could change. >> bruce has another question. we still have time for some more. >> bruce mcdonald again. we saw last year on the subject of the code of conduct, some voices emerged in the congress that were opposed, not just in congress but outside as well, giving arguments such as, this is really a treaty. this short-circuits the senate, so on and so forth. and then we got into election mode and all discussions focused on that. now here we are -- i wanted to

ask if you could give your sense of any readings you have taken of the attitudes in the on the hill, toward the possibility of a space code of conduct this year and also how you might respond to those arguments you have heard. >> a good question. we are consulting very closely with congress on the code of conduct. i spent a lot of my time briefing the relevant committees. as you mentioned, there are some concerns among some members with regards to the code. but in close coordination, we are allaying many concerns. with regard to the senate, i think it is important that the code of conduct would not create a legally binding obligation on the united states. it is not in the international

agreement. i think it is also important there are a number of these types of political agreements. the bush administration concluded that un debris mitigation guidelines in 2007. in 2002, the code of conduct. the vienna document, which was concluded in 1999. fore is a long precedent this. one of the challenges -- another question we get on the international side is why didn't the eu do this within the un? one of the challenges is that the code deals with security issues but also with sustainability issues. there is not one for him within the un that deals with these issues in a comprehensive

manner. the conference on disarmament deals with security issues. this is really -- they're thinking was you need to this issue in a comprehensive manner. i think it is very difficult to draw distinctions tween security and sustainability issues. for example, conducting tests in space is a security issue but it is also a sustainability issue as well. back to your question, we are consulting closely with the congress on this. we are addressing the concerns that have been raised. i want to come to the final point, this does not create a legal obligation that would bind the united states.

that is the key point. that is usually the threshold between the executive branch and congress on these types of issues. >> if i could follow-up, there are a number of legally binding agreements the u.s. enters into. but do not require consent, is that ruled out in the case of the code? >> it will be a politically binding agreement. >> i guess we have time for a follow-up question. >> what is special about the makesenvironment that

arms control not verifiable? as compared with space, air, or land? what is special about space it does not work? >> let me ask you this -- how can you verify, from a technology point of view, what is on the top of a satellite? you do not know. the technology is not there. all of the verification experts i have spoken to is faced with the current technology we have. it would be very difficult to be able to tell the senate, were to negotiate a treaty that was submitted to the advice and consent of the senate, we would have to say this is verifiable. what the experts tell me, and i am not a verification expert. what do they tell me is that they cannot effectively say this is verifiable with the current technology we have. >> on that note, i would like to thank frank for coming here today. sharing the views on the future of engagement on outer space,

see. and thank you for coming. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2013] >> defense secretary chuck hagel here at fort mcnair here in washington, d.c. plans to discuss strategic and fiscal challenges facing the defense department peronistas secretary hagel's first major address as defense secretary. he will be introduced by greg martin, the president of the national defense university. we understand he is running a few minutes late. live coverage want to get under way. president obama have to caught

today to talk about the state's newly passed gun-control laws. he will be at the denver police academy calling for universal background checks for gun buyers. also asking congress to vote on an assault weapons ban and allow the large capacity ammunition magazines. his speech will begin at 5:00 eastern. we will have live coverage here on c-span. also tonight, a look a protest groups in america. he recently spoke with the code pink founder but how protest movements into the political discussion. we want your reaction to the discussion. here is a brief look at a code pink protest. >> i speak for the mothers, children -- >> we will stop again. somalia, and whoever else. the cia and obama administration

refuses to tell congress what countries we are killing children in. senator feinstein -- >> if you could please expedite the removal. >> do your job! world peace depends on it. >> please proceed. we are going to hold the hearing. i'm going to ask that the room be cleared and that the code pink associates not be permitted to come back in. we have done this five times now. five times is enough. >> you can see the entire conversation with code pink co- benjamin beginning

tonight at 8:00 eastern have. let us know what you think. be sure to join us tonight for a live discussion about the impact of protest movements. once again, we are live for national defense university at fort mcnair here in washington, d.c., a witty remarks from defense secretary chuck hagel. planning to discuss the challenges facing the defense department.

>> we are still a couple of moments away from comments from defense secretary chuck hagel to discuss this could challenge is based in the pentagon. we will have those remarks as soon as they begin. earlier today, remarks from the senior white house advisor discussing policy, politics, and the news of the day. >> the president's budget will come out wednesday april 10. they are behind, there is every

budget, ryan budget, so what will the president's budget tell us, why is it important? >> i do not think it will come as a big surprise. our fiscal discussions have been very clear about what he wants to do in terms of creating jobs and growing economy and how we deal with the deficit. what it does do is provide a detailed roadmap of how we are going to do things, like, provide more jobs by rebuilding roads and bridges, in scenting manufacturing jobs coming back to the united states. our fiscal policies are well known, they have been well talked about, they have been put on the web. the reason the budget is delayed is because we did not know -- our budgeted different from congresses. how you found every program. late on newry year's eve, a new year's day, it

was unclear what the revenue coming into the government would be, so we have to wait for that. >> of your budget balanced? >> our budget will follow the path of all of the bipartisan budget commission that move us towards putting us towards a sustainable place. this idea -- i know this is the new thing. talkingpoll tested point of the republicans. you do not want to balance the budget for the purposes of simply balancing the budget by slashing everything it does to create economic growth, create jobs. but we are going to do is have a budget that helps the middle class, rose the economy, and reduces the deficit. a path that ison consistent with the mutually agreed upon levels of debt that

reduction we should have. theigh level democrats on hill tell us they have been assured the change in cpi included, are they right? >> i will not get ahead of the budget. i know this is a very big day for reporters in washington. i do not want to ruin that for folks here. [laughter] but i can tell you is the president has offered something to speaker boehner. that included, among other things, the changed cpi. that is on the table and is waiting for someone to come take it. >> so it would be fair to expect that to be included in the budget? >> what it is fair to expect, that offer is on the table. -- our not something offer is not ideal position.

we thought it was a common sense position. the came to us and said, these are the things we will like in a deal. we would like changing the medicare age. we said we did not agree with that. they liked cpi. we said, we do not love that, this is the way we would approach it, but in the context of a deal, we will have to give something. this is something we are willing to do on the condition that we have protections for the most vulnerable and older and for seniors. that is what is on the table now. live pictures from national defense university at fort mcnair here in washington. still awaiting remarks from defense secretary chuck hagel. expected to talk about some of the fiscal challenges facing the defense department. he is expected in a couple of minutes. we will have live coverage here on c-span.

>> the president of the national defense university, major greg martin. >> good to see everybody. good afternoon. we are honored to host the

secretary of defense for his first formal policy address. i cannot think of a place more fitting than the national defense university for him to deliver it. ndu is, after all, a place where we study the nexus between strategy and policy so that our rising military and civilian leaders can better advise those who govern on how best to preserve the peace, or if necessary, to prevail in war when all other avenues have been exhausted. our speaker is certainly more than qualified to talk about the art of both peace and war. secretary hagel is a combat veteran who enlisted in the united states army and volunteered for service in vietnam, where he was awarded two purple hearts while writing to the rank of sergeant, serving as an infantry squad leader alongside his brother tom. as a center in the great state

of nebraska, he served on the foreign relations, banking, and intelligence committees. he has extensive private sector experience co-founded one of the largest independent cellular networks in the world. he has also served as the president and ceo of the united services organization, better known as the u.s. so -- uso. with a distinguished professor at georgetown university and chairman at the atlantic council. secretary hagel epitomizes the nexus between military and civilian, public and private, national and international, and policy and strategy. and lead in all of domains, and he will lead our department of defense through these challenging times and it into our next chapter. ladies and gentlemen, please give a strong ndu welcome to

our 24th secretary of defense, the honorable chuck hagel. [applause] >> thank you. [applause] very much. thank you. [applause] general, thank you. i am very proud to be here. i am proud to be among all of you who give so much every day, and will continue to contribute to our country and making a better world, and i think you for that service. for a fancy general, to give introductiontated to a retired army sergeant -- >> [laughter]

>> it is something that i rarely get. of i am very appreciative the generous introduction, and to you, general, all of your staff and colleagues, thank you for what you continue to do for our country in this important institution, an institution, i think, as important for our country and for the development not only of our leaders, but the leaders of other nations who are represented here today. i think it is one of the wisest investment our country has made and will continue to make in developing our leaders, helping other nations develop their , based not just on military doctrine, but on[appla] general, thank you. i am very proud to be the principles and values of the mutual respect and dignity, and

the rule of law. this facility, this institution, has done that very effectively for many, many years, so i think you all. -- thank you all. generations of military leaders have come to this institution here at fort mcnair to receive training and education. they needed to succeed not just in combat, but in their daily lives. the responsibilities you all will take on will be immense. everyday, you will face decisions with real implications for the safety and welfare of our troops, and the security of our nation. as you move onward and upward in your career as, i would urge you to always keep three questions in mind before making decisions. first, does this help protect national security?

america's this in strategic interest, which include the economic, political, and moral dimensions of our interests and responsibilities? third, is this were the of the service and sacrifice of our men and women in uniform and their families? these questions speak to the department of defense's most basic responsibilities, defending the nation, the advance in america's strategic interests, and keeping faith with its quiet heroes. how we fulfill these interim responsibilities at a time of unprecedented ships in the world order, new global challenges, and deep global fiscal uncertainty, is the subject of my remarks today. i want to focus on challenges, choices, and opportunities. the challenges posed by a changing strategic landscape and new budget constraints. the choices we have in

responding to these challenges, and the opportunities that exist to fundamentally reshape defense enterprises to better reflect 21st century realities. inappropriate venue for this discussion today because the success of these efforts ultimately rests on the abilities and judgments of our military and civilian leaders. those here today will make those .ecisions and those judgments as president dwight eisenhower said during a visit to the ground more than 50 years ago, and i quote, the wise and prudent resources required by the the defense calls for extraordinary skill in measuring the military, political, and economic and social machinery of our modern life so that the greatest effective use is made of resources with a minimum of

waste and misapplication. a former army officer who graduated from this campus shortly before the onset of the great depression, eisenhower knew of what he spoke. the security landscape of 2013 is a far different character than the world of 1960, or even the world of a few years ago. but eisenhower's words still ring true today. the united states is emerging from more than a decade of war in iraq and afghanistan but the threat of a violent extremism persists and continues to emanate from week states and and govern spaces in the middle east and north africa. there also stands an array of other security challenges of varying vintage and agreed to risks of the united states. the proliferation of dangerous weapons and materials, the increased availability of advanced military technologies in the hands of state and not state actors, the risk of

regional conflicts that could draw in the united states, the debilitating and dangerous curves of human despair and poverty, as well as the uncertain implications of the environmental degradation. cyber attacks barely registered as a threat to a decade ago, have grown into a defining security challenge with potential adversaries seeking the ability to strike america's security, energy, economic, and critical infrastructure with the benefit of anonymity and distance. the world today is combustible and complex. america's responsibilities are as enormous as they are humbling. these challenges to our security and prosperity demand america's continued global leadership and global engagement, and they require a principled realism that is true to our values. the united states military

remains an essential tool of american power, but one that must be used judiciously, with a keen appreciation of its limits. most of the press and security challenges today have important political, economic, and cultural components and do not necessarily lend themselves to be resolved by conventional military strength. indeed, the most destructive and horrific attack ever on the united states came not from fleets, ships, bombers, or armored divisions, but from 19 fanatical men wielding box cutters and 1-way plane tickets. so our military must continue to adapt. we adapt in order to remain effective and relevant in the face of threats markedly different from those that shaped our defense institution during the cold war. since 9/11, the military has

grown more deployable, more expeditious erie, more flexible, more lethal, and certainly more professional. it has also grown significantly ofer, as measured by the age our plan -- of our force. and it has grown enormously more expensive in every way. today, america's defense institutions are emerging, and in some cases, recovering from more than a decade of sustained conflict while confronting new strategic challenges. in doing so would significantly less resources than the department has had in the past. as this audience knows well, this process of change and a realignment is already well underway. it began under secretary gates, who recognized what he called the post-9/11 gusher of defense spending was coming to an end. under his leadership, the farmer were to reduce overhead cost

within the military services and cancelled or curtailed in number of major modernization program that were performing poorly, or poorly suited to real world demand. the realignment continued undersecretary panetta who worked closely with president and the joint chiefs of staff to craft new defense strategic guidelines and a defense budget which reduced the department planned spending by $487 billion over 10 years. even while reshaping the force to become smaller and leaner, this budget made in foreign investments in the new strategy, including rebalancing our defense posture to asia- pacific, and prioritizing critical capabilities, such as cyber, special operations, and unmanned systems. so the department of defense had been preparing for this inevitable downturn in defense budgets and has taken significant steps -- steps to

reduce spending and adapt to a new strategic environment. nevertheless, the combination of fiscal pressures and a grid lock political process has led to far more abrupt and deeper reductions that were planned or expected. now dod is grappling with the serious and immediate challenges of sequester, which is forcing us to take as much as a $41 billion cut in this current fiscal year. if it continues, we are projected to reduce spending by another $500 billion over the next decade. the sequestered cut, because it falls heavily on operations and modernizationmodernization accos already having a destructive and potentially damaging impact on the readiness of the force. the department has already made many cuts, including cuts to travel and facility

maintenance. we have imposed hiring freezes and halted many important but not essential activities. however, we will have to do more. across-the-board reductions aside we are looking at will demand that we furloughs civilian personnel which could affect morale and may impact productivity. cuts will fall heavily on maintenance and training which further erodes the readiness of the force, and will be costly to regain in the travel and faciliy future. as the service chiefs have said, we are consuming our readiness. meanwhile, our investments accounts and the defense industry -- industrial base are not spare damage. as we also take indiscriminate cuts across these areas of the budget. these are the challenges that face us right now and i am determined to help the department get ahead of them. general dempsey has said we need to read through this crisis. i have told our senior leadership, the joint chiefs,

the service secretaries and undersecretary of defense, we are all in this together, and we will come out of it together. the task ahead for the department is to prepare for the future, but not in a way that the collects, or is oblivious to the realities of the present. we are therefore undertaking a process to develop choices, options, and priorities to deal with further reductions in the defense budget that could result from a comprehensive deficit- reduction deal, or the persistence of sequestered. all anchored by the president defends strategic guidance. my goal in directing the strategic choices in management review, which is now being led by deputy secretary carter, who is working with general dempsey, is to ensure that we are realistic the confronting both our strategic and fiscal challenges. it is not to assume or tacitly except deep cuts, such as those

imposed by sequester, will endure, or that these cuts can be accommodated without a significant reduction in military capabilities. at the same time, we cannot simply wish or hope our way to carrying out irresponsible national security strategy for its implementation. the department must understand the challenges and uncertainties plan for the risks, and yes, recognize the opportunities inherent in budget constraints in more efficient restructuring. this exercise is also about matching missions with resources, looking at ends, ways, and means. this effort, by necessity, will consider big choices which could lead to fundamental change and a further prioritization of the use of our resources to retain that involve not just tweaking or chipping away at existing structures and necessary,but where

fashioning entirely new ones that are better suited to 21st century realities and challenges. all this with the goal of insuring that we can better execute the strategic guidance as set out by the president. in order for this effort to proceed with the to be steely- eyed and clear headed in our analysis and explore the full range of options for implementing our national security strategy. we need to challenge all past assumptions and we need to put everything on the table. for example, is already clear to me that any serious effort to reform or reshape our defense enterprise must confront the principal drivers of growth in the department's budget, namely acquisitions, personnel costs, and overhead. in many respects, the biggest long-term fiscal challenge facing the department is not be flat or